Avenue Supermarts Ltd, the operator of the DMart retail chain, reported mixed numbers for the fourth quarter ended March 2025. While the company clocked a healthy 17% year-on-year (YoY) revenue growth, reaching ₹14,872 crore compared to ₹12,726.6 crore in Q4 FY24, its bottom line saw a marginal decline. Net profit tanks to ₹551 crore, down 2% from ₹563 crore in the same quarter last year, impacted primarily by margin compression.
The company’s quarterly EBITDA rose slightly by 1.2% YoY to ₹955.3 crore from ₹943.7 crore. However, EBITDA margins contracted significantly to 6.4%, down from 7.4% in the year-ago period, indicating increased operational costs and competitive pressures in the retail segment.
Despite the recent correction in stock price—currently trading at ₹4,059, down 26% from the 52-week high, DMart continues to command a premium valuation with a price-to-earnings (P/E) ratio of 97.6, well above the industry average of 41. Its price-to-book value stands at 12.3 versus the industry average of 3.95, showcasing strong investor faith in its long-term business model.
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Key metrics reveal a robust operational structure: return on capital employed (ROCE) is 18.0%, return on equity (ROE) is 13.5%, and debt-to-equity remains extremely low at 0.04, underlining the company’s strong financial discipline. However, the negative free cash flow of ₹954 crore and a steep CMP/FCF ratio of -1,565 signal rising capital expenditures or working capital demands.
Long-term growth remains intact with compounded sales growth of 24% over the last 3 years and profit growth of 22% in the same period. However, profit growth in the trailing twelve months (TTM) moderated to just 8%, indicating the need for improved margin management going forward.
DMart’s promoter holding remains strong at 74.64%, with a zero pledged share percentage—another positive. Institutional interest is stable, with DIIs now holding over 9% and FIIs around 8.18%.
Analyst Outlook on DMart
Of 30 analysts covering the stock, 30% recommend a ‘Buy’, while 30% suggest a ‘Hold’. Around 23% of analysts have a negative to underperform view, possibly due to premium valuations and near-term margin pressures.
Disclaimer
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